FX Empire

European Equities: Economic Data, Brexit, and U.S Politics in Focus

Bob Mason
5 min read

In This Article:

Economic Calendar:

Wednesday, 7th October

German Industrial Production (MoM) (Aug)

ECB President Lagarde Speaks

Thursday, 8th October

German Trade Balance (Aug)

ECB Monetary Policy Meeting Minutes

The Majors

It was another bullish day for the European majors on Tuesday, with the DAX30 rising by 0.61% to lead the way. The CAC40 and EuroStoxx600 saw more modest gains of 0.48% and 0.07% respectively.

Economic data from Germany and Trump’s return to the Oval Office provided support. The upside was limited, however, with a rise in new COVID-19 cases and new containment measures in EU testing support.

Late in the day, news hit the wires of Trump ending relief bill negotiations on Capitol Hill until after the election. The European markets had closed, with the announcement sending the U.S majors into the red.

The Stats

It was a relatively quiet day on the Eurozone economic calendar.

Key stats included August factory orders and September’s construction PMI figures from Germany.

In August, factory orders jumped by 4.5%, coming in well ahead of a forecasted 2.6% rise. In July, factory orders had risen by 2.8%.

According to Destatis,

  • Domestic orders increased by 1.7% and foreign orders by 6.5%, month-on-month.

  • New orders from the euro area jumped by 14.6%, with orders from other countries rising by 1.5%.

  • The manufacturers of intermediate goods increased by 4.5%, with manufacturers of capital goods seeing a 4.7% rise.

  • Consumer goods producers saw new orders increase by 4.2%.

  • For the auto sector, orders increased by 0.9%, which took orders to above pre-crisis levels.

  • New orders in the manufacture of machinery and equipment rose by 11.4%. In spite of the increase, orders were still 5.8% below February 2020 levels.

While factory orders were positive, Germany’s construction PMI slipped from 48.0 to 45.5. The PMI had a muted impact on the DAX30, however, after impressive service and manufacturing PMIs and factory orders.

From the U.S

It was a relatively busy day on the economic calendar. Key stats included August trade figures and JOLTs job openings.

In August, the trade deficit widened from $63.4bn to $67.1bn. Economists had forecast a widening to $66.1bn.

  • While exports rose from $168.1bn to $171.9bn, imports increased from $231.7bn to $239.0bn.

JOLTs job openings were also disappointing, with openings coming in at 6.493m. This was below a forecasted 6.685m and down from 6.697m in July.

On the monetary policy front, FED Chair Powell was also in focus late in the European session. The FED Chair called for more help from the U.S government, warning of a weak economic recovery if more stimulus is not delivered.

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